Browsing Research documents by Author "Foss, Kirsten"
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Foss, Kirsten; Foss, Nicolai Juul (København, 2000)[More information][Less information]
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Foss, Kirsten; Foss, Nicolai J.; Klein, Peter G.; Klein, Sandra K. (København, 2005)[More information][Less information]
Abstract: Several writers link entrepreneurship to asset ownership, trying to incorporate the theory of entrepreneurship into the theory of the firm. The critical link, we argue, is capital heterogeneity. Transaction cost, property rights, and resourcebased approaches to the firm assume that assets, both tangible and intangible, are heterogeneous; arranging these assets to minimize contractual hazards, to provide efficient investment incentives, or to exploit competitive advantage is conceived as the prime task of economic organization. None of these approaches, however, is based on a systematic theory of capital heterogeneity. In this paper we outline the approach to capital developed by the Austrian school of economics and integrate it into an entrepreneurial theory of the firm. We refine Austrian capital theory by defining capital heterogeneity in terms of subjectively perceived attributes, that is, the functions, characteristics, and uses of capital assets. Such attributes are not given, but have to be discovered by means of entrepreneurial action. Thinking of entrepreneurship as the organization of heterogeneous capital provides new insights into the emergence, boundaries, and internal organization of the firm, and it suggests testable implications about how and where entrepreneurship is manifested. Keywords: Entrepreneurship, heterogeneous assets, judgment, ownership, firm boundaries, internal organization. JEL Codes: B53, D23, L2 URI: http://hdl.handle.net/10398/7292 Files in this item: 1
ckg-wp 2005-5.pdf (277.6Kb) -
tensions, credible delegation and implications for new organizational formsFoss, Kirsten; Foss, Nicolai Juul (København, 2002)[More information][Less information]
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Foss, Kirsten; Foss, Nicolai J. (København, 2003)[More information][Less information]
Abstract: The notion of distributed knowledge is increasingly often invoked in discussions of economic organization. In particular, the claim that authority is inefficient as a means of coordination in the context of distributed knowledge has become widespread. However, very little analysis has been dedicated to the relation between economic organization and distributed knowledge. In this paper, we concentrate on the role of authority as a coordination mechanism under conditions of distributed knowledge, and also briefly discuss other issues of economic organization. We clarify the meanings of authority and distributed knowledge, and criticize the above claim by arguing that authority may be a superior mechanism of coordination under distributed knowledge. We also discuss how distributed knowledge influences the boundaries of firms. Our arguments rely on insights in problem-solving and on ideas from organizational economics. URI: http://hdl.handle.net/10398/6894 Files in this item: 1
03-08.pdf (330.4Kb) -
a property rights-based view of competitive strategyFoss, Kirsten; Foss, Nicolai Juul (København, 2002)[More information][Less information]
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Foss, Kirsten (København, 1998)[More information][Less information]
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Foss, Kirsten; Foss, Nicolai Juul (København, 2000)[More information][Less information]
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Foss, Nicolai Juul; Foss, Kirsten (København, 2006)[More information][Less information]
Abstract: This paper responds to Kim and Mahoney’s "How Property Rights Economics Furthers the Resource-Based View: Resources, Transaction Costs and Entrepreneurial Discovery" (a comment on Foss and Foss, 2005). While we agree with many of their arguments, we argue that they fail to recognize how exactly transaction costs and property rights shape the process of entrepreneurial discovery. We provide a sketch of the mechanisms that link entrepreneurship, property rights, and transaction costs in a resource-based setting, contributing further to the attempt to take the RBV in a more dynamic direction. URI: http://hdl.handle.net/10398/7476 Files in this item: 1
cbs forskningsindberetning smg 47.pdf (357.2Kb) -
How Organizational Design Can Make Delegation CredibleFoss, Kirsten; Foss, Nicolai J. (København, 2005)[More information][Less information]
Abstract: Credible delegation of discretion obtains when it is a rational strategy for managers not to overrule employee decisions that are based on delegated decision rights or renege on the level of delegated discretion (and this is common knowledge). Making delegation of discretion credible becomes a crucial issue when organizations want to sustain the advantages that may flow from delegation: Such advantages are dependent on motivated employees, and managerial overruling or reneging is harmful to motivation. However, little work has been done on how organizations can make delegation credible. We argue that key elements of organizations (i.e., organizational structure, coordination mechanisms, reward structures, and interdependencies between activities) and how these fit influence the credibility of delegation. Fit configurations of organizational elements reduce the probability of managerial intervention that may harm employee motivation. This introduces a neglected incentive dimension to the organizational design literature. Moreover, it is argued that harmful intervention may be reduced by increasing managers’ costs of intervening. Refutable propositions are derived. URI: http://hdl.handle.net/10398/7427 Files in this item: 1
cbs forskningsindberetning smg 25.pdf (688.5Kb) -
Foss, Kirsten; Foss, Nicolai J. (København, 2008)[More information][Less information]
Abstract: In his seminal 1945 essay Hayek argued that the dispersed nature of much commercially relevant knowledge places strong constraints on the feasibility of centralized allocation and coordination mechanisms, but that there remains a problem of making efficient use of such knowledge (the first Hayekian knowledge problem). He realized that firms, because they make use of authority, are also challenged by dispersed knowledge, and his emphasis on delegation as a response to dispersed knowledge may lead to the prediction that (large) firms shouldn’t exist. Yet (large) firms obviously do exist (the second Hayekian knowledge problem). Recently, many management and organizational scholars have echoed Hayek’s argument that centralized coordination mechanisms, such as authority, may fail in the presence of dispersed knowledge. We examine these modern arguments and argue that they rest on shaky foundations: dispersed knowledge is a less strong constraint on authority than is often thought. We examine the wider implications of this for knowledge-based arguments in management and organizational theory, and call for more research into the micro-foundations of such arguments. URI: http://hdl.handle.net/10398/7462 Files in this item: 1
smg wp 2008-14.pdf (393.3Kb) -
Foss, Kirsten; Foss, Nicolai Juul; Klein, Peter G.; Klein, Sandra K. (København, 2002)[More information][Less information]
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an organizational economics perspectiveFoss, Kirsten; Foss, Nicolai Juul (København, 1998)[More information][Less information]
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how much do they really differ? And how does it matter?Foss, Kirsten; Foss, Nicolai J. (København, 1999)[More information][Less information]
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knowledge-based and property rights perspectivesFoss, Kirsten; Foss, Nicolai Juul (København, 2000)[More information][Less information]
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Authority under "Distributed Knowledge"Foss, Kirsten; Foss, Nicolai (København, 2003)[More information][Less information]
Abstract: We examine the argument, put forward by modern management writers and, in a somewhat different guise by Austrian economists, that authority is not a viable mechanism of coordination in the presence of "distributed knowledge" (which corresponds to Hayek’s treatment of the use of dispersed knowledge in society). We define authority and distributed knowledge and argue that authority is compatible with distributed knowledge. Moreover, it is not clear on theoretical grounds how distributed knowledge impacts on economic organization. An implication is that the Austrian argument that designed orders are strongly constrained by the Hayekian knowledge problem (Hayek, Kirzner, Sautet) is shaky. The positive flipside of this argument is that Austrians confront an exciting research agenda in theorizing how distributed knowledge impacts economic organization. URI: http://hdl.handle.net/10398/7291 Files in this item: 1
the limits to designed orders.pdf (73.42Kb) -
A knowledge governance perspectiveFoss, Kirsten; Foss, Nicolai J. (København, 2008)[More information][Less information]
Abstract: A critical knowledge governance problem concerns the consequences for the use of the authority if the knowledge that is essential in a work setting is partially unknown to the person who is to exercise authority. Is it possible to rationally direct work and activities and efficiently utilize knowledge under such conditions? Recently, many scholars have given negative answers to this question, arguing that authority relations are becoming strained by the increasingly distributed nature of knowledge in and between firms. We analyze this argument on the basis of definitions of "authority” and "distributed knowledge.” This allows us to show that --- while intuitively appealing --- the argument that authority cannot be an efficient coordination mechanism in the presence of distributed knowledge is at best problematic. The argument is based on the flawed inference that because the holder of authority is ignorant about some of the knowledge held by employees, he cannot rationally direct them. However, it is correct that the quality of centralized direction (planning, authority) may be compromised by distributed knowledge, leading to choices of other governance mechanisms and structures. URI: http://hdl.handle.net/10398/7425 Files in this item: 1
smg wp 2008-01.pdf (447.9Kb) -
Toward a Dynamic Property Rights PerspectiveFoss, Nicolai J.; Foss, Kirsten (Frederiksberg, 1998)[More information][Less information]
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Toward a Dynamic Property Rights PerspectiveFoss, Kirsten; J. Foss, Nicolai (København, 1998)[More information][Less information]
Abstract: We discuss the relations between alternative conceptualizations of the market process - neoclassical, Austrian and radical subjectivist/evolutionary - and alternative approaches to economic organization, for example, nexus of contract theory, Williamsonian transaction cost economics and the dynamic transaction cost approach of Langlois and Robertson. We argue that there is a distinct need for more firmly grounding theories of economic organization in theories of the market process, and that key ideas of the more dynamic conceptualizations of the market are likely to substantially enrichen the theory of economic organization. URI: http://hdl.handle.net/10398/8102 Files in this item: 1
8778730511.pdf (91.48Kb) -
Controlling Intervention Hazards in the Network MNCFoss, Kirsten; Foss, Nicolai J.; Nell, Phillip C. (Frederiksberg, 2011)[More information][Less information]
Abstract: The MNC literature treats the (parent) HQ as entirely benevolent with respect to their perceived and actual intentions when they intervene at lower levels of the MNC. However, HQ may intervene in subsidiaries in ways that demotivate subsidiary employees and managers (and therefore harm value-creation). This may happen even if such intervention is benevolent in its intentions. We argue that the movement away from more traditional hierarchical forms of the MNC and towards network MNCs placed in more dynamic environments gives rise to more occasions for potentially harmful intervention by HQ. Network MNCs should therefore be particularly careful to anticipate and take precautions against “intervention hazards.” Following earlier research, we point to the role of normative integration and procedural justice, but argue that they also serve to control harmful HQ intervention (and not just subsidiary opportunism). URI: http://hdl.handle.net/10398/8380 Files in this item: 1
Kirsten Foss_SMG WP13_2011.pdf (634.1Kb) -
Improving Lead-Time in Product DevelopmentFoss, Kirsten (København, 2001)[More information][Less information]
Abstract: The impact of modular products on the organization of product development has recently attracted interest in academia. This paper explores the economic rational behind the idea that modular products result in modular product organizations using a team-theoretic approach. An important implication that can be drawn from team theory is that the nature of the design problem and the way in which it can efficiently be decomposed into design tasks strongly influence the information structures of organizations and therefore also the extent to which the organization can be characterized as a modular organization. Different economic rationales behind task definitions are identified and discussed. The organization of product development activities also can be expected to vary with the main goal of the product development team. I argue that when the minimization of lead-time is the main goal one should expect to find a more modular product development organization among firms that follow a modular product development strategy compared to those that follow an integral product development strategy. URI: http://hdl.handle.net/10398/6931 Files in this item: 1
linkwp01-12.pdf (364.7Kb)
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